Pound (GBP) Bolstered by Johnson’s Return
The Pound (GBP) enjoyed a solid start this week as GDP investors cheered Boris Johnson’s return to Downing Street.
However, Sterling’s gains were capped as Johnson’s first statement upon his return made it clear that he isn’t ready to begin relaxing the lockdown, stating he wouldn’t ‘throw away the effort and sacrifice’ made by the public so far.
Coming up today, the publication of the Confederation of British Industry’s (CBI) distributive trade index could see the Pound reverse some of its gains as economists predict it will show a sharp slump in retail activity this month.
Euro (EUR) Buoyed, End in Sight for European Lockdown
The Euro (EUR) edged higher on Monday as EUR investors welcomed the announcement that several European countries are preparing to lift coronavirus restrictions.
France, Spain and Italy (some of the countries hardest hit by the coronavirus outbreak) will be reopening parts of their economies early next month, bolstering hopes of a U-Shaped recovery in the Eurozone.
However, EUR investors are likely to remain cautious as a potential re-emergence of the coronavirus could see the Eurozone shuttered at a moment’s notice.
US Dollar (USD) Slumps amid Improving Market Sentiment
The US Dollar (USD) stumbled out of the gate this week, retreating through yesterday’s session as demand for the safe-haven currency was undermined as a positive mood prevailed.
This improvement in market sentiment came as new coronavirus cases continued to drop and an increasing number of countries began discussing plans to start easing their lockdowns.
But it remains to be seen if this positive momentum can be maintained, with the US Dollar poised to rebound if sentiment starts to sour.
Canadian Dollar (CAD) Dented as Oil Sell-Off Resumes
A renewed oil sell-off saw the Canadian Dollar (CAD) retreat on Monday. WTI Crude tumbled as much as 25% to fall back to $12 a barrel on fresh storage fears, greatly limiting the appeal of the oil-sensitive ‘Loonie’.
Australian Dollar (AUD) Fluctuates in Mixed Outlook
The Australian Dollar (AUD) fluctuated in overnight trade, initially giving ground amid another rout in oil prices but reclaiming some ground as more countries push for the easing of lockdown restrictions.
Looking ahead, the ‘Aussie’ may be infused with more volatility later tonight as Australia publishes its quarterly inflation figures.
New Zealand Dollar (NZD) Tumbles on Speculation of Negative Interest Rates
The New Zealand Dollar (NZD) dove overnight on Monday as analysts warned the Reserve Bank of New Zealand (RBNZ) may cut interest rates below zero this year in an effort to support New Zealand’s recovery.